> ## Documentation Index
> Fetch the complete documentation index at: https://docs.hermetica.fi/llms.txt
> Use this file to discover all available pages before exploring further.

> Where does hBTC yield come from?

# Yield

#### Yield mechanism

hBTC is designed to generate **BTC-denominated yield** by deploying into **on-chain DeFi strategies** and systematically converting all realized profits back into Bitcoin.

<Info>
  Yield is **market-dependent** and may vary over time.
</Info>

#### Yield sources

hBTC may source yield from a range of DeFi primitives, including:

* **Basis strategies**
* **Lending markets**
* **Staking**
* **AMM liquidity provision**
* **Real-world assets (RWAs)**

<Frame>
  <img src="https://mintcdn.com/hermeticalabsinc/cr4cicPK4ZdtyX_c/assets/images/hbtc/how-it-works/yield/screenshot-from-2025-12-22-17-14-22.png?fit=max&auto=format&n=cr4cicPK4ZdtyX_c&q=85&s=2b3d318871a38e31853aeb3eb61d09bc" alt="Image for Yield" width="1424" height="801" data-path="assets/images/hbtc/how-it-works/yield/screenshot-from-2025-12-22-17-14-22.png" />
</Frame>

#### Launch configuration

At launch, hBTC yield is primarily generated from:

1. **Basis strategies**, using **USDh** as the core yield mechanism
2. **Stacks Dual Stacking**, leveraging Stacks Proof-of-Transfer (PoX) consensus mechanism

Additional strategies may be introduced over time as the protocol expands.

#### Strategy governance and expansion

Hermetica continuously evaluates additional on-chain yield opportunities across DeFi. New strategies are introduced only after completing **technical diligence and risk review**.

<Info>
  Any strategy changes are **announced in advance** and take effect only after the **governance timelock** has elapsed.
</Info>